In October, CNNMoney.com reported that American small business owners are overwhelmingly dissatisfied with their banks: “Small business owners are less than pleased with their relationships with their banks, especially big banks, according to a study from consumer satisfaction research firm, J.D. Power and Associates… Main Street businesses' overall satisfaction with and loyalty to their banks is declining, according to the U.S. Small Business Banking Satisfaction Study released…[October 2010]. Satisfaction is now at 711 on a 1,000-point scale, down from 718 in 2009. What's more, small businesses are the least satisfied of the financial services customers J.D. Power surveyed.”
As the economy improves, those “Main Street” businesses need small business financing to meet increasing levels of customer demand. But now, they are hesitant to head to the bank looking for small business financing. CNNMoney reports, “Small business owners value having an account manager who understands their business well, communicates often, and is easily accessible at both the bank itself and online. They also want to know in advance about possible fees.”
Dissatisfied with the lack of service, funding, and transparency in their banks, many entrepreneurs seeking small business financing are turning to accounts receivable factoring services for their funding needs. Accounts receivable factoring services (often called “invoice factoring services”) are a reliable form of small business financing that increases cash flow without creating debt. And because invoice factoring approvals are based on the value of a company’s invoices and the creditworthiness of their customers, small business owners are able to access this financing much more readily than traditional small business loans.
In addition, invoice factoring services rendered through reliable firms, such as those affiliated with Factors Against Fraud and the International Factoring Association, provide the intangible benefits “Main Street” businesses no longer receive from their banks: individual service, easy account access, knowledgeable associates. What’s more, reputable online invoice factoring service companies often provide round-the-clock customer support by phone and online, making “banker’s hours” a constraint of the past.
Disclaimer: The information presented above is general and intended for educational purposes only. It is not a substitute for practical legal or accounting advice on any specific situation.
